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Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

December 27, 2007

NAFTA and WTO: job killer, or slave overseer?

Anyone who has spent time in social or political movements knows that language and slogans are often painfully fought out in overcaffeinated and excruciatingly long meetings in poorly lit rooms. When I was active in the sweatshop movement in the late 1990s / pre-9-11 2000s, the topic of discussions was whether our movement was "anti-globalization," "anti-corporate globalization," anti-Global Apartheid, "pro-people's globalization," or all or none of the above.

Immediately after 9-11, there were the long meetings about how and whether we should rhetorically connect the imminent war/invasion to the IMF/World Bank protests supposed to be happening in late September, 2001. And of course there is constant hand-wringing about the terms "free trade" and "fair trade," and what if anything any of these terms mean.

Such convos aren't really my cup of tea. If you like any of these titles, peg 'em on. But in doing the research on our most recent toy report, I got a bit of a labeling bug too, this time around whether we should call NAFTA or WTO a "job-killing" agreement:

The shift of U.S. toy production to China has been a long time in the making. 1972 was the first year that America imported Chinese toys, following President Nixon’s visit to the country. China was first granted normal trade relations status in 1981, meaning it faced lower tariffs than a communist country would otherwise face. This status was renewed every year through 2001. By 1986, China was actively liberalizing its economy and lobbying for membership in what would become the WTO, and was rapidly expanding its U.S. toy exports. By 1991, China had overtaken Japan as the number one U.S. source of foreign-made toys. Throughout the 1990s, the Clinton administration passed nearly a dozen trade agreements with China, which continued to edge out other countries for U.S. toy market share. By the end of the decade, China accounted for a majority of toys sold in the United States. When Congress approved China’s WTO membership in 2000, Chinese-produced toys already accounted for nearly 57 percent of U.S. toy purchases – a figure that has increased to 74 percent (nearly $15 billion) since that time.

These facts illustrate a point we try to make regularly on this blog, that many of the industrial impacts in terms of jobs occurred as tariffs were lowered (in the GATT or preference programs for poor countries) prior to NAFTA and the WTO. So when movement folks say that NAFTA is a "job-killing agreement," they:

are saying in a roundabout way that the U.S. trade deficit continued to increase after NAFTA, and with NAFTA countries in particular. With trade policy that either mandated balanced trade (s/t that is NAFTA and WTO-illegal) or under trade that automatically balanced due to exogenous factors, there would have been jobs in tradable sectors here that aren't here now; or

NAFTA's (essentially) permanent reductions in tariffs and investor rights incentivized companies that wouldn't have done so otherwise to relocate production overseas, thus reducing jobs in tradable sectors that might have been here otherwise.

When most people say NAFTA is a job-killing agreement, they do NOT mean that the total number of jobs in the US somehow declined (unemployment has been fairly constant, except during the late 1990s thanks not to trade policy but to Alan Greenspan). They are making a point about jobs in TRADABLE sectors (ie. primarily manufacturing), and linking either in a macro sense to the deficit, or in a micro sense in terms of the incentives affecting individual business decisions. Indisputably, there are fewer union jobs and fewer manufacturing jobs than there used to be, and we've been in a trade imbalance scenario, so somehow that has to be explained.

So why do corporations even fight for these trade policies, if they had already offshored so much of their production prior to NAFTA and the WTO? I think the short answer is that it's an unholy alliance between a few exporters (think Caterpillar and agri-business), with a lot of industries that have already offshored production (think toys, apparel) and want to lock in duty-free access for their products coming back into the U.S. market, and with the whole of the multinational corporate lobby (esp. the services and pharmaceutical sector, but also the above) who want some insurance against progressive political change. There's no quicker way to get backdoor, international deregulation at the state, local and national levels of government than pushing these deals.

So perhaps a more apt metaphor for NAFTA rather than "job-killer" is "slave overseer" or "prison guard." The new neoliberal world order begun in the 1970s has prejudiced people both in the U.S. and abroad, and agreements like NAFTA and WTO from the 1990s and today merely serve as an enforcement apparatus to lock in and maintain this state of affairs.

The problem remains that people would probably rather see themselves as dignified workers losing a job rather than as prisoners or slaves. So, I'm taking suggestions - best metaphor wins!

Comments

The WTO is a biased undemocratic organization of nations that limits America’s ability to act in its own best interest. Since entering the WTO in 2001, trade with China alone has resulted in the loss of 2.3 million jobs through 2007.

Beyond the quantifiable numbers of economic hardship in America, the WTO is inherently wrong for other reasons. The organization remains indifferent to issues of workers rights, child labor and environmental protection standards. The organization has little to no transparency as all of its hearing are closed to the public. It is no wonder then that we lose nine out of every 10 trade disputes brought before the body.

The WTO has come to represent the most efficient form of colonization the world has ever seen - reaping all the benefits with no downsides of occupation. The corporate agenda of the organization has destroyed the developing economies of the world, exploiting cheap resources and giving them little in return.

Thanks for your comments. Check out our new Trade Data Center for quantitative evidence of U.S. job loss due to NAFTA (http://www.citizen.org/Page.aspx?pid=4300 ) and our new report "Lies, Damn Lies, and Export Statistics: How Corporate Lobbyists Distort Flawed Trade Deals," which demonstrates that U.S. export growth has lagged for countries with which the US HAS Free Trade Agreements (FTAs) versus non-FTA partners (http://www.citizen.org/Page.aspx?pid=4398 ).